Slide 1: Presentation on Results for the 2nd Quarter FY2019
Presentation on Results for the 2nd Quarter FY2019 Idemitsu Kosan Co., Ltd. November 14, 2019
Slide 2: Table of Contents
Table of Contents 1. FY 2019 2nd Quarter Results (1) Overview (2) Segment Information 2. Forecast for FY 2019 Performance (1) Overview (2) Segment Information 3. Shareholder Returns 4. Reference Materials Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 2
Slide 3: FY 2019 2nd Quarter Results
FY 2019 2nd Quarter Results ・FY 2018(E): Estimate of the total of Idemitsu Kosan and Showa Shell Sekiyu on a 100% consolidated basis ・Segment information: Total of operating income and equity earnings of affiliates (Equity Income)
Slide 4: Crude Oil Price Trends
Crude Oil Price Trends <Monthly Dubai Crude Oil Price Trends and Assumptions for Performance Forecasts> (USD/Bbl.) FY 2018 Actual FY 2018 2Q Average: US$73.2/Bbl. FY 2019 Actual 5/15 Assumption Assumption announced on 5/15: US$70.0/Bbl. FY 2019 2Q Average: US$64.3/Bbl. Revised Assumption (Oct~ ): US
Slide 5: JPY/USD Exchange Rate (TTM) Trends
JPY/USD Exchange Rate (TTM) Trends <Monthly JPY/USD (TTM) Trends and Assumptions for Performance Forecasts> (JPY/USD) FY 2018 Actual FY 2018 2Q Average: 110.3 JPY/USD FY 2019 Actual 5/15 Assumption Assumption announced on 5/15: 110.0 JPY/USD FY 2019 2Q Average: 108.6 JPY/USD Revised Assumption (Oct~
Slide 6: Overview
Overview <FY 2019 2nd Quarter Results> ■ Operating income excluding inventory impact + equity income decreased by ¥87.4 billion year-on-year, to ¥69.7 billion, mainly due to decreased earnings from the petroleum segment due to reduced petroleum product margins from time lags and a decrease in earnin
Slide 7: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) FY 2018 2Q FY 2019 2Q Change Crude Oil (Dubai) 73.2 64.3 (8.9) (12.2%) Crude Oil (Brent) 70.6 66.0 (4.5) (6.4%) Naphtha Price (Customs) 645 540 (104) (16.2%) Thermal Coal (NEWC) 103.4 88.1 (15.3) (14.8%) Exchange Rate (TTM) 110.3
Slide 8: (2) Segment Information
(2) Segment Information 1) Operating Income + Equity Income (Units: ¥ billions) FY 2018 2Q(E) FY2019 2Q Change Petroleum 132.3 (5.5) (137.8) － (Excluding inventory impact) 75.7 15.4 (60.3) (79.6%) Basic Chemicals 28.4 14.3 (14.1) (49.8%) Functional Materials 18.2 13.7 (4.5) (24.7%) Power and Renewab
Slide 9: (2) Segment Information: Analysis of Factors Affecting Operating Income
(2) Segment Information 2) Analysis of Factors Affecting Operating Income + Equity Income (Excluding inventory impact, year-on-year) (Units: ¥ billions) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 9
Slide 10: Forecast for FY 2019 Performance
Forecast for FY 2019 Performance Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved.
Slide 11: (1) Overview
(1) Overview 1) Crude Oil / Exchange Rates (Units: $/Bbl., $/Ton, ¥/$) Assumptions 5/15 Forecast Revised Forecast Difference (Oct~ ) Crude Oil (Dubai) 70.0 63.1 (6.9) (9.9%) 60.0 Crude Oil (Brent) 72.0 63.4 (8.6) (11.9%) 61.5 Naphtha Price (Customs) 650 515 (135) (20.8%) 485 Thermal Coal (NEWC) 93.0
Slide 12: (2) Segment Information
(2) Segment Information 1) Operating Income + Equity Income (vs. 5/15 Forecast) (Units: ¥ billions) 5/15 Forecast Revised Forecast Difference Petroleum 78.0 31.0 (47.0) (60.3%) (Excluding inventory impact) 78.0 59.0 (19.0) (24.4%) Basic Chemicals 45.5 45.0 (0.5) (1.1%) Functional Materials 39.0 31.0
Slide 13: (2) Segment Information: Analysis of Factors vs 5/15 Forecast
(2) Segment Information 2) Analysis of Factors Affecting Operating Income + Equity Income (Units: ¥ billions) (Excluding inventory impact, vs 5/15 Forecast) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 13
Slide 14: Shareholder Returns
Shareholder Returns Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved.
Slide 15: Shareholder Returns
Shareholder Returns ■Policy With consideration for the returns to shareholders is an important responsibility of management, the New Integrated Company will steadily secure shareholder returns by realizing the effects of integration ■FY 2019-2021 Plan Aim to achieve shareholder returns of 50% or mor
Slide 16: Reference Materials
Reference Materials
Slide 17: Table of Contents
Table of Contents １. Overview of the New 5. Market Conditions Integrated Company 6. Refineries Utilization 2. Financial Reporting 7. Number of Service (1) FY 2019 2nd Quarter Stations Results 3. Sensitivity 4. Sales and Production (1) Sales/Production Volume (2) Sales/Production Volume Forecast Copy
Slide 18: Overview of the New Integrated Company
１．Overview of the New Integrated Company Petroleum Segment Functional Materials Segment Refining capacity: 945,000 BD *1 (Lubricants, performance chemicals, electronic ※１ materials, functional asphalt, agricultural- biotechnology, solid electrolyte) Domestic fuel oil sales volume: 43.0 million KL/ye
Slide 19: Financial Reporting: Net Sales by Segment
２．Financial Reporting (1) FY 2019 2nd Quarter Results 1) Net Sales by Segment (Units: ¥ billions) FY 2018 2Q (E) FY 2019 2Q Change Petroleum 2,739.6 2,368.8 (370.8) (13.5%) Basic Chemicals 309.2 234.3 (74.9) (24.2%) Functional Materials 215.9 196.0 (19.8) (9.2%) Power and 72.9 64.3 (8.5) (11.7%) Ren
Slide 20: Financial Reporting: Extraordinary Gains/Losses
２．Financial Reporting (1) FY 2019 2nd Quarter Results 2) Extraordinary Gains/Losses (Units: ¥ billions) FY 2018 2Q (E) FY 2019 2Q Change Gain on Sale of Fixed Assets 1.1 2.0 0.9 Gain on Sale of affiliate Stock 0.0 0.0 (0.0) Gain on Transfer of Business 2.3 0.0 (2.3) Other 7.6 19.3 11.7 Total Extraor
Slide 21: Financial Reporting: Consolidated Balance Sheet
２．Financial Reporting (1) FY 2019 2nd Quarter Results 3) Consolidated Balance Sheet (Units: ¥ billions) 4/1/2019 9/30/2019 Change 4/1/2019 9/30/2019 Change Cash and Deposits 141.7 140.6 (1.1) Total Current Liabilities 1,781.2 1,653.4 (127.8) Receivables, Inventory, etc. 1,677.8 1,560.4 (117.4) Total
Slide 22: Financial Reporting: Consolidated Statement of Cash Flows
２．Financial Reporting (1) FY 2019 2nd Quarter Results 4) Consolidated Statement of Cash Flows (Units: ¥ billions) FY 2019 2Q CF from Operating Activities (53.1) Net Income before Tax Adjustments 68.9 Depreciation Expense 47.7 Increase in Sales Receivables and Inventory 48.7 Other (218.3) CF from Inv
Slide 23: Sensitivity
３. Sensitivity (1) Impact of a US$1/bbl. Decrease in Crude Oil Prices on FY Earnings Decrease in refinery ￥1.0billion Petroleum fuel costs, etc. Inventory impact (￥5.0 billion) (￥4.0 billion) Oil Exploration & Production (￥1.0 billion) (2) Impact of a 1 JPY/USD Appreciation on FY Earnings Decrease i
Slide 24: Sales and Production: Sales Volume (Petroleum Segment)
４. Sales and Production (1)－1.Sales Volume (Petroleum Segment) L,%） （Units:Thousand KL,%） FY 2018 2Q （E） FY 2019 2Q Change Gasoline 7,917 7,385 (532) (6.7%) Naphtha 204 115 (89) (43.6%) Jet Fuel 2,607 2,626 19 0.7% Kerosene 997 985 (12) (1.2%) Diesel Oil 5,641 5,343 (298) (5.3%) Heavy Fuel Oil A 1,6
Slide 25: Sales and Production: Sales Volume (Other Segments)
４. Sales and Production (1)－2.Sales Volume (Basic Chemicals Segment) ons, %) (Units:Thousand tons, %) FY 2018 2Q （E） FY 2019 2Q Change Basic Chemicals 2,130 1,992 (138) (6.5%) (1)－3.Sales Volume (Functional Materials Segment) ons,%） （Units:Thousand KL,Thousand tons,%） FY 2018 2Q FY 2019 2Q Change Lu
Slide 26: Sales and Production: Oil E&P and Coal Production Volume
４. Sales and Production （1）－5.Oil E&P – Production Volume ,including Gas (Resources Segment) BOED） （Units:Thousand BOED） FY 2018 2Q FY 2019 2Q Change Norway 28.5 20.7 (7.8) (27.3%) Total('000BOE) 5,160 3,751 (1,409) (27.3%) *Figures based on interest owned by Idemitsu's resource development subsidia
Slide 27: Sales Volume Forecasts (Petroleum Segment)
４. Sales and Production (2)－1.Sales Volume Forecasts (Petroleum Segment) （Units:Thousand KL,%） Revised 5/15 Forecast Difference Forecast Gasoline 14,880 14,350 (530) (3.6%) Naphtha 390 300 (90) (23.0%) Jet Fuel 5,310 5,230 (80) (1.5%) Kerosene 4,610 4,350 (260) (5.6%) Diesel Oil 11,060 10,700 (360)
Slide 28: Sales Volume Forecasts (Other Segments)
４. Sales and Production (2)－2.Sales Volume Forecasts (Basic Chemicals Segment) (Units:Thousand tons, %) Revised 5/15 Forecast Difference Forecast Basic Chemicals 4,270 4,210 (60) (1.4%) (2)－3.Sales Volume Forecasts (Functional Materials Segment) （Units:Thousand KL,Thousand tons,%） Revised 5/15 Forec
Slide 29: Oil E&P and Coal Production Volume Forecasts
４. Sales and Production （2）－5.Oil E&P – Production Volume Forecasts ,including Gas (Resources Segment) （Units:Thousand BOED） Revised 5/15 Forecast Difference Forecast Norway 22.7 21.7 (1.0) (4.5%) Total('000BOE) 8,300 7,930 (370) (4.5%) *Figures based on interest owned by Idemitsu's resource develop
Slide 30: Market Conditions: Crude Oil Prices (Dubai and Brent)
５. Market Conditions （1）Crude Oil Prices (Dubai and Brent) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 30
Slide 31: Market Conditions: Gasoline, Crude Oil CIF
５. Market Conditions （2）Gasoline, Crude Oil CIF (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 31
Slide 32: Market Conditions: Diesel Oil – Crude Oil CIF
５. Market Conditions （3）Diesel Oil – Crude Oil CIF (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 32
Slide 33: Market Conditions: Paraxylene, Mixed xylene, Naphtha
５. Market Conditions （4）Paraxylene, Mixed xylene, Naptha (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 33
Slide 34: Market Conditions: Styrene Monomer, Naphtha
５. Market Conditions （5）Styrene Monomer, Naptha (Prices and Spreads) Copyright©2019 Idemitsu Kosan Co.,Ltd. All Rights Reserved. 34
Slide 35: Refineries Utilization; Number of Service Stations
６．Refineries Utilization Capacity Utilization(%) BCD FY2015 FY2016 FY2017 FY2018 FY2019 2Q Idemitsu 86% 88% 88% 88% 86% Showa Shell 91% 85% 88% 93% ７．Number of Service Stations (Locations) FY2015 FY2016 FY2017 FY2018 FY2019 2Q Idemitsu 3,666 3,589 3,545 3,501 3,459 Showa Shell 3,193 3,123 3,028 2,96
Slide 36: Precaution statement about forecasts
Precaution statement about forecasts Any information about forecasts for the Company’s operating results, management strategy and management policy contained in this documents other than historical facts is prepared, according to judgments made by the top management of the Company based on informati